Return Life Cycle Management
With the increasing scarcity of products and the need to contain the negative environmental effects of waste, RLM needs to be integrated into current business processes.
We can define Return Life Cycle Management as the management of all processes and services in the chain with the aim of recovering and reusing products and materials, with the aim of reducing and reducing waste flows, in a way that adds value for the entire chain.
RLM is the additional step on supply chain management and ensures that the chain as a whole is complete. From linear flows to a circle of use and reuse of products, materials and raw materials. RLM integrates the Cradle-to-Cradle principle into the existing business processes.
If we look at the annual waste flows, it quickly becomes clear how important RLM is.
In the United States, consumers discard 47,400,000 computers, 27.2 million televisions, and 141 million mobile devices annually. Only a quarter of it is recycled. Many of the products contain toxins such as lead, mercury and cadmium. In addition, many precious metals are thrown away in this way, such as copper, silver, gold and palladium, which can be easily reused. Given the rising prices of raw materials, reuse is increasingly an invaluable process.
View on Returns
For many companies, the product life cycle ends when it is finally consumed. From that moment on, people have little insight into the products or their parts, until the moment that the product returns to the chain via an RMA process.
However, many companies do not have the right processes and tools available to deal with Returns effectively and efficiently. To date, Reverse Logistics is still the child of the bill and is controlled by a multitude of fragmented processes and systems. In addition, RMA often involves several parties, so that the view of the product is quickly lost.
Research by Blumberg Advisory Group shows that over 50% of surveyed companies are not satisfied with their current way of driving their Returns. The companies also indicate that the Customer Satisfaction is far too low. Only 19% of the respondents were really satisfied with the CS level reached.
Returns are therefore controlled by a variety of systems. In 41% of cases by an ERP often in combination with other systems. The systems of the various market parties are also not compatible. As a result, an OEM has barely any insight into the return flows. Whether it concerns reuse, parts or recovery of raw materials.
For that reason it is imperative that an RLM is able to integrate the communication between the different parties into a fully-fledged system. In addition, RLM must be integrated into the existing strategy and business processes of all organizations involved.
Integrating RLM into the existing business strategy and processes through integrated [SaaS or Cloud] solutions provides companies with the insight to get maximum value from a Return flow.
- By making better use of existing processes and assets, a significant cost reduction can be achieved.
- Integration of administrative flows and improvement of planning reduces the level of errors and better business decisions
- The legislation compels companies to achieve more compliance when it comes to controlling the waste problem.
- Customer Satisfaction level will rise considerably through better information provision and management of the return flow.
The development of the Return Life cycle and increasing legislation in this area is forcing companies to integrate their existing processes with RLM. Not only because of legislation or a reduction in the waste stream, but also because of the increasing scarcity of essential raw materials. RLM offers an important condition for success there.
More and more companies see the necessity but also the value advantages of RLM. It significantly reduces costs and improves the quality and service that can be delivered to customers. RLM thus offers the opportunity to structurally improve the bottom-line results of an organization.
Reverse Lifecycle Management (RLM) – The next opportunity in reverse logistics Blumberg Advisory